Land sale to Savoy denied

Tuesday

Apr 2, 2013 at 9:27 AMApr 2, 2013 at 9:29 AM

By John MulcahyDaily Telegram Staff Writer

A proposal to sell up to eight acres of land owned by the city of Adrian to Savoy Energy Limited Partnership was defeated Monday when the Adrian City Commission split 3-3 on a resolution to sell the land.

A resolution must have a majority to pass. Commissioner Milo Warren was not at the meeting.

The land is part of the property known as Witt Farm, where Savoy already has drilled an oil well.

Goals of the agreement were to centralize Savoy’s oil-processing operations — separating oil, gas and water — for oil from wells on city land and nearby properties, and to shift liability for any environmental contamination from the city to Savoy.

Savoy also would have been granted rights of way for oil pipelines to carry oil from a well in Heritage Park — and any additional wells there — to the processing facility.

Savoy would have paid the city $10,000 per acre for the land and resold it to the city for $1 when oil production ends.

A motion to table the issue until the commission’s April 15 meeting also was defeated on a 3-3 vote.

Mayor Greg DuMars and commissioners Jerry Gallatin and Charles Jacobson voted in favor of the sale. The three also voted against tabling the issue.

Commissioners Tom Faulhaber, Julie Berryman Adams and Cary Carrico voted against the sale and in favor of tabling the issue.

DuMars and city administrator Dane Nelson said Savoy actually has the right under its existing leases of city-owned land to build a central processing facility and pipe oil to it from other wells. The difference with the sale, DuMars said, would be that the city would get $70,000 to $80,000 and the environmental liability would be Savoy’s, not the city’s.

In response to a question, Nelson also said that part of the agreement would have been that Savoy do all its processing at the Witt Farm site. At present, it has the right to build processing facilities at each well site.

However, members of the public objected during public comment that by selling the land the city was giving up oversight possibilities and that just shifting liability did not address environmental issues connected with the site.

They also called for baseline environmental studies so any change due to the oil operations could be measured.

Sister Elise Garcia of the Adrian Dominican Sisters read a letter from the sisters’ Office of the Prioress asking that the issue be tabled until there could be a public hearing and asking whether selling the land diminished environmental hazards connected with the oil operations.

According to the letter, and another dated Feb. 22 from the sisters to the mayor and commission, the city’s comprehensive plan identifies Witt Farm as a “high groundwater recharge area” with highly permeable soils.

“The fact of its vulnerability remains,” Garcia told the commission.

Other speakers echoed that sentiment.

“I’m not interested in liability, I’m interested in prevention,” city resident John Kuschell said.

Kuschell also said the city needs a plan for what to do in case of an oil spill or other emergency related to the oil-drilling operations.

Other speakers called for more bonding and cautioned about possible dangers from deep-injection wells used to get rid of brine used in the oil extraction process.

At several points, the discussion became heated, with DuMars telling one audience member not to interrupt or he would require him to leave. The audience member left on his own.

Arguing for tabling the issue, Adams said the public had a right to have their questions answered before a vote.

“I do believe there are enough people who have brought questions here that it needs to be addressed,” Adams said.

Jacobson, who made the motion to sell the land, said the issue was one of limiting the spread of the processing plants.

Faulhaber, who made the motion to table the issue, said he was not necessarily against the proposal, but made the motion in the spirit of compromise.

Gallatin, who voted to sell the land, said he, too, thought the people deserved answers to their questions.